Leading Korean conglomerate and mobile phone company join forces with IDT to bridge standard and Internet telephony in Korea

HACKENSACK, NJ -- August 7, 1997 -- IDT Corporation (NASDAQ: IDTC) today announced an agreement with Daewoo Corporation and Naray Mobile Telecom, Inc. to exclusively offer Net2Phone Direct, IDT's phone-to-phone-via-the-Internet service, in Korea. The $1.5 million deal involves the purchase of Net2Phone Direct servers and infrastructure as well as setup and development. Daewoo, recently named one of the world's 25 largest corporations by Fortune Magazine, already has an exclusive agreement to sell Net2Phone, IDT's PC-to-phone technology, in Korea.

"The agreements we have signed with Daewoo, Naray and comparable Net2Phone Direct partners will enable IDT to emerge as one of the world's largest Internet telephony companies," said IDT's President Jim Courter. "With Internet telephony slated to become a $2 billion industry by 2001, IDT is well positioned to service the high volume international telephone markets without sacrificing quality, service or price." "Daewoo Corporation is very excited to be providing the latest and most advanced telecommunications applications in the field of Internet telephony to the Korean market," said Daewoo's Managing Director Hong-Key Jhun. "IDT has proven to be a leader in Internet telephony with its PC-to-phone product, and our partnership with IDT regarding Net2Phone Direct further strengthens our commitment to offering low-cost telecommunications with a proven leader in the industry."
Calls placed over Net2Phone Direct are converted from a standard telephone to the Internet's digital signal processing and transmitted via the Internet seamlessly to any telephone in the world. Due to the fact that the call only travels a short distance on the circuit switch network, the total cost of the call will be much lower than traditional telephone costs. The Company intends to launch Net2Phone Direct in the U.S. later this month, and expects to launch in Italy and other international locations by the end of the first quarter FY98.

"We are uniquely positioned to become the leader in all facets of Internet telephony because we can provide worldwide termination due to our vast telecommunications infrastructure," said Mordy Rothberg, Net2Phone's International Sales Director. "Whereas other Internet telephony companies offer phone-to-phone products where callers are restricted to calling specific countries where they have a gateway, only Net2Phone allows a completely non-restricted environment, allowing calls to terminate to any telephone in every country. Net2Phone works hand-in-hand with IDT's telecom and Internet divisions to provide the highest-quality and most comprehensive Internet telephony service available."

"This relationship with IDT will further establish Naray as a leader in the field of Korean Telecommunications, and we look forward to the future success of Net2Phone," said JK Kim, President of Naray. "Naray is very excited about the opportunity to provide Korean customers with quality international calls at very low prices."

Under the agreement, Daewoo will distribute IDT's Net2Phone Direct servers and software in Korea. Naray will provide IDT's Internet telephony services acting as the official operator and representative of IDT in Korea.

IDT Corporation is a diversified telecommunications company with seven years of innovation within the international telecommunications arena. The Company provides international long distance services to individuals and businesses in over 180 countries and directly to telecommunications carriers in the US and overseas. The Company currently has over 150,000 US retail customers using an array of services including international long distance and Internet services, and prepaid calling cards. The Company is also a leader in Internet Telephony, with its Net2Phone product - the first commercial telephone service to bridge live calls between the Internet and telephones.

Daewoo Corporation, ranked the 24th largest Corporation worldwide by Fortune Magazine, has major business activities in international trading, international finance, resource development, domestic and overseas investment, project organizing media & film entertainment business, domestic marketing and a growing range of other international projects. In 1996, the company's total sales reached $19.39 billion and exports totaled $13.1 billion.

Naray Mobile Telecom, Inc. provides wireless communications services throughout Korea. Established in 1992, Naray has over 2,000,000 subscribers with 1996 revenues exceeding $200 million.